In this essay we will discuss about United Nations Conference on Trade and Development (UNCTAD). After reading essay you will learn about: 1. Meaning of United Nations Conference on Trade and Development (UNCTAD) 2. Functions of United Nations Conference on Trade and Development (UNCTAD) 3. UNCTAD XII 4. Generalized System of Preferences 5. Common Fund for Commodities and Other Details.
Contents:
- Meaning of United Nations Conference on Trade and Development (UNCTAD)
- Functions of United Nations Conference on Trade and Development (UNCTAD)
- UNCTAD XII
- Generalized System of Preferences
- Commodities and Other Details
- Global System of Trade Preference Among Developing Countries
Essay # 1. Meaning of United Nations Conference on Trade and Development (UNCTAD):
In the early 1960s, growing concerns about the place of developing countries in international trade led many of these countries to call for the convening of a full- fledged conference specifically devoted to tackling these problems and identifying appropriate international actions.
The first United Nations Conference on Trade and Development (UNCTAD) was held in Geneva in 1964. Given the magnitude of the problems at stake and the need to address them, the conference was institutionalized to meet every four years, with intergovernmental bodies meeting between sessions and a permanent secretariat providing the necessary substantive and logistical support.
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The UNCTAD aims at creating development-friendly integration of developing countries into the world economy.
Essay # 2. Functions of United Nations Conference on Trade and Development (UNCTAD):
i. To serve as the focal point within the UN for the integrated treatment of trade and development and interrelated issues in the areas of finance, technology, investment, and sustainable development
ii. To serve as a forum for intergovernmental discussions and deliberations, supported by discussions with experts and exchanges of experience, aimed at consensus building
iii. To undertake research, policy analysis, and data collection in order to provide substantive inputs for the discussions of experts and government representatives
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iv. To facilitate cooperation with other organizations and donor countries providing technical assistance tailored to the needs of the developing countries, with special attention being paid to the needs of least developed countries, and countries with economy in transition
The UNCTAD secretariat works together with member governments and interacts with organizations of the UN system and regional commissions, as well as with governmental institutions, non-governmental organizations, and the private sector, including trade and industry research institutes, and universities worldwide.
The Ministerial Conference which meets every four years is the UNCTAD’s highest decision-making body and sets priorities and guidelines for the organization and provides an opportunity to debate and evolve policy consensus on key economic and development issues.
The UNCTAD is the most visible symbol of the UN’s assurance to promote the economic and social advancement of all people of the world and this remains equally relevant in the changing world economic order. The UNCTAD continues to be an important resource base for the South and it provides a forum to network and form issue-based coalitions with like-minded countries, especially the developing countries. The UNCTAD has played a valuable role in educative, early warning, and watch-dog capacities vis-a-vis developing countries’ interests in the working of the WTO.
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Over the years, the UNCTAD has focused its analytical research on the linkages between trade, investment, technology, and enterprise development. It has put forward a positive agenda for developing countries in international trade negotiations, designed to assist developing countries in better understanding the complexity of the multilateral trade negotiations and in formulating their positions.
Moreover, it has expanded and diversified its technical assistance, which today covers a wide range of areas, including training trade negotiators, and addressing trade-related issues, debt management, investment policy reviews and the promotion of entrepreneurship, commodities, competition law, policy, trade, and environment.
Developing countries have found extremely useful UNCTAD’s technical cooperation programmes (Fig. 4.3) in trade efficiency. Trade Points, harmonization of customs procedure, debt management programmes, database on trade information (TRAINS), etc.
Essay # 3. UNCTAD XII:
UNCTAD has continued to play a critical role in emphasizing the development dimension of issues in the fields of international trade and investment and related areas. In particular, UNCTAD has been addressing the imbalances of globalization and the need to overcome the supply constraints of developing countries, so as to ensure development gains and poverty reduction.
The last UNCTAD XII held in Accra in Ghana during 20-25 April 2008, based on the theme of ‘addressing the opportunities and challenges of globalization for development’.
The sub-themes include:
i. Enhancing coherence at all levels for sustainable and poverty reduction in global economic policy making
ii. Taking up key trade and development issues and the new realities in world economy
iii. Enhancing an enabling environment at all levels to strengthen productive capacity, trade and investment
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iv. Strengthening UNCTAD by enhancing its development role, impact, and institutional effectiveness
The agreement reached at UNCTAD XII is called ‘The Accra Accord and Declaration’. UNCTAD XII highlighted the challenges faced by many developing countries that strive to integrate successfully into the international economic and financial system. It sets out the agenda for economic and social development spanning areas ranging from commodities, trade and debt to investment and new technologies.
India wants UNCTAD to focus on certain aspects, such as enhanced and predictable market access for agriculture and better terms of trade, removal of market entry barriers to trade, financial support, volatility in the capital market, trade diversification and moving up the value chain into technology intensive manufactured exports, greater policy space to develop local industries, strengthening of technological capacity, and the need for a more benign and development sensitive international technology and Intellectual Property Rights (IPR) regime.
Generalized System of Preferences (GSP), International Commodities Agreements, Code of Conduct for Liner Conferences, Control of Restrictive Business Practices, Global System of Trade Preferences (GSTP) among developing countries are some of the major agreements launched under the UNCTAD.
Essay # 4. Generalized System of Preferences:
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The Generalized System of Preferences (GSP) is a non-contractual instrument by which industrialized (developed) countries unilaterally, and on the basis of non-reciprocity, extend tariff concessions to developing countries. The GSP was formally accepted in 1968 by UN members at the second UNCTAD conference in New Delhi.
The general underlying principles of the scheme are non-discrimination and non-reciprocity. The GSP offers developing countries tariff reductions, and in some cases, duty-free concessions for their manufactured exports and certain agricultural exports as well.
The GSP is a tariff instrument, which is autonomous and complementary to GATT. Its aim is to grant developing countries tariff preferences over developed countries, thus allowing their exports easier access to the market.
Essay # 5. Common Fund for Commodities:
A Common Fund for Commodities (CFC) was established in 1989 with the following objectives:
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i. To serve as a key instrument in attaining the agreed objectives for the Integrated Programme for commodities adopted by the UNCTAD
ii. To facilitate the conclusion and functioning of International Commodity Agreements (ICAs), particularly concerning commodities of special interest to developing countries
In order to fulfil these objectives, the Fund has been authorized to exercise the following functions:
i. To contribute, through its First Account to the financing of international buffer stocks and internationally coordinated national stocks, all within the framework of ICAs
ii. To finance, through its Second Account, measures in the field of commodities other than stocking
iii. To promote coordination and consultation through its Second Account with regard to measures in the field of commodities other than stocking, and their financing, with a view to provide commodity focus
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Since the conception of the fund in 1970s, certain elements of commodity trade have changed dramatically, in particular the shift away from market regulating instruments to a liberalized system of market forces.
Due to this, the Common fund has not been able to put into operation the First Account capital, which was primarily meant for the financing of international buffer stocks and internationally co-ordinated national stocks within the framework of the ICAs.
The resources of the Common Fund are derived from subscription of shares of directly contributed capital paid in by member countries. The interest earned by the capital of the First Account is used to finance projects under the First Account Net Earning initiative and to cover the administrative expenses of the fund.
Therefore, member countries do not need to pay annual membership fees. Commodity development measures of the Common Fund are financed by either loans or grants or a combination of both. The capital resources of the Second Account can only be used for loans whereas the voluntary contributions are available for grants and/or loans.
Essay # 6. Global System of Trade Preference Among Developing Countries:
The agreement on the Global System of Trade Preferences (GSTP) among developing countries was established in 1988 as a framework for the exchange of trade preferences among developing countries in order to promote intra-developing-country trade.
The idea received its first political expression at the 1976 ministerial meeting of the Group of 77 (G77) in Mexico City and was further promoted at G77 ministerial meeting in Arusha (1979) and Caracas (1981).
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The GSTP lays d own rules, principles, and procedures for the conduct of negotiations and for implementation of results of the negotiations. Coverage of the GSTP extends to arrangements in the area of tariffs, non-tariff measures, direct trade measures including medium and long-term contracts and sectoral agreements.
One of the basic principles of the agreement is that it is to be negotiated step by step, and improved upon and extended in successive stages with periodic reviews.
During the first session, India exchanged concessions with 14 countries. The number of tariff lines on which concessions were granted by India is 31 and India received tariff concessions in return on a wide range of products of its export interests from 14 countries.
The major principles and features of the agreement are given here:
i. The GSTP is reserved for the exclusive participation of members of the Group of 77 and China and the benefits accrue to those members that are also ‘participants’ in the agreement.
ii. The GSTP must be based and applied on the principle of mutuality of advantages in such a way as to benefit equitably all participants, taking into account their respective levels of economic development and trade needs. The agreement envisages preferential measures in favour of LDCs.
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iii. To provide a stable basis for GSTP preferential trade, tariff preferences are bound and form part of the agreement.
iv. The GSTP must supplement and reinforce present and future sub-regional, regional, and inter-regional economic groupings of developing countries and must take into account their concerns and commitments.
The agreement in its present form is too modest; the concessions in scope and quality are few, limited, and insufficiently attractive to motivate greater trade among countries of the South. Additional efforts, additional instruments, additional participating countries, additional stimulus, and concessions are, therefore, required for the system to fully gain ground.
Presently, 44 countries have acceded to the agreement; these include India, Pakistan, Bangladesh, Brazil, Indonesia, Malaysia, the Philippines, Singapore, Sri Lanka, Thailand, and Tanzania.
Participants may convene rounds of negotiations in order to broaden and deepen the scope of trade preferences.
Three rounds of negotiations have so far been launched: the first in Brasilia (1986), the second in Tehran (1992), and the on-going third round in Sao Paulo (2004). During UNCTAD XI, ministers of GSTP participants met at Sao Paulo on 16 June 2004 to further negotiate tariff concessions and launch a new round of negotiations.